“Fear is now pervasive,” oil expert Dan Yergin says amid market rout

Oil guru Daniel Yergin told CNBC that world is in a period of "true turmoil," with financial markets and economies in crisis while the new coronavirus continues to spread rapidly.

Following a disagreement on production cuts between OPEC and its allies, oil markets plunged 26% on Monday. Russia declined to lower output last week, and Saudi Arabia announced Saturday that it was offering discounts to its official selling prices next month. The kingdom is also reportedly planning to raise production.

On the back of these events, Asia markets saw sharp drops Monday, while U.S. stock futures pointed to a much lower open.

"We are in another period of true turmoil," said Yergin, the vice chairman of IHS Markit.

Referring to what happened in 2008 and 2009, he said that was more focused on the financial markets. "This is now turning into an economic crisis along with a health crisis," he told CNBC, referring to the ongoing coronavirus outbreak.

"I think we're going to see a lot more freezing up of economic activity in the United States, not because of economics but because of the virus," he said. "The fear is now pervasive."

The "backdrop" to all this is the coronavirus, Yergin said. "That's what really splintered the (OPEC+) alliance," he said.